Biomerica, Inc.'s (NASDAQ:BMRA) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Biomerica, Inc.'s (NASDAQ:BMRA) future prospects. Biomerica, Inc., a biomedical technology company, together with its subsidiaries, develops, patents, manufactures, and markets diagnostic and therapeutic products or detection and/or treatment of medical conditions and diseases worldwide. The US$69m market-cap company posted a loss in its most recent financial year of US$2.3m and a latest trailing-twelve-month loss of US$4.5m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Biomerica will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Biomerica

According to the 4 industry analysts covering Biomerica, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.2m in 2022. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 104% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Biomerica given that this is a high-level summary, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Biomerica has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Biomerica to cover in one brief article, but the key fundamentals for the company can all be found in one place – Biomerica's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is Biomerica worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Biomerica is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Biomerica’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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